Most budgets can be really difficult to follow—especially when you’re under financial stress. BUT when you’re living paycheck to paycheck, budgets are extremely crucial to your survival. Budgets work to restrict us from spending on things that aren’t important. Its primary goal is to keep us out of debt. While the thought of a debt-free life is good, it isn’t all that matters. Working 24/7 just to pay bills won’t bring you a balanced financial life.
The solution? Allocate fun money in your budget.
What is fun money? Your fun money is basically your guilt-free money which you can spend on anything you want. It doesn’t go to your basic needs, debts, or insurance. It’s the money primarily saved for enjoyable activities and material things that has been on your wishlist for a very long time—like a new bag, a new pair of pants, or a trip out of town.
Your fun money will bring balance to your restrictive monthly budget and will give you a budgeting style that’s more attainable and based on reality. In this article, we’re going to learn the many ways a fun budget can actually help you.
1. You’ll have greater discipline on your other spendings.
Human brains are hardwired to seek pleasure. It will always find a way to seek what it loves most.
When we think of people that are “great” with their money, we often refer to those very stingy ones who seem to never spend money on superficial things. However, this isn’t true. People that are good with money spend money on things they love because they have prepared for it.
The most financially responsible people are also the happiest, simply because they know how to spoil themselves. Although it’s important to save money for all the bills you need to pay for like rent, electricity, food, and necessities, you should also consider creating a budget for your wants.
By dedicating a budget for the things you desire, you’ll have a good reason to exercise discipline in your daily spending. You’ll also be less likely to overspend or forget bills you have for the month.
2. Prevents you from buying something expensive.
Restrictive budgets may work for your short term goals but they can be really destructive in the long run. According to financial experts, we all have a spending desire and when we starve this habit, it will explode and result in unnecessary spending. Money is meant to be spent and when you’re not spending it, you’re setting yourself up for trouble later on.
If you restrict yourself too much, you may find yourself one day buying something you can’t really afford. This happens way too often than you realize. When we starve ourselves with occasional spoils, we end up spending more than we planned.
To prevent binge shopping, give yourself a little flexibility, create a fun budget each month. A fun budget will save you from breaking down. Plus, it will allow you to buy anything you want without any guilt.
3. Exercise more financial responsibility in a marriage
Money is a very important issue in marriage. If both of you are good with money, there will be less and less argument about it. Nobody wants to marry a person who deprives their partner of fun. This is why it’s important that you BOTH allocate fun money in your monthly budget.
Your relationship will find more balance if you allow each other to spend money for things you want. If you’re in a marriage where you combine your money with your partner, a fun money is really crucial to prevent blaming each other on unnecessary purchases.
4. Create a mindset centered on abundance
Having money for fun will change your mindset from scarcity to abundance. A person with a scarcity mindset has this belief that he always has little money and doesn’t deserve to buy anything. When you’re in debt and on a strict budget, it’s easy to adopt this scarcity mindset which can be really stressful and bad for your mental and emotional health.
Instead of obsessing about how much debt you have or how big your bill is this month, you should focus on creating a more balanced financial habit. No matter how much self-discipline you have, hoarding your money can get exhausting and depressing. You’ll lose motivation to work because you clearly don’t enjoy your income.
By always thinking you don’t have enough money, you’ll always be depriving yourself or your family of money for shopping, movies, night outs, etc. which can be very frustrating. However, if you have a fun budget you’ll find that your happiness and those around you will increase. Abundance is not riches beyond measure, it’s having enough money to take care of your needs and a little bit more for your wants. Abundance is all about balance.
Fun Money Doesn’t Have To Be Expensive!
Building your budget for fun money can be difficult if you’re not considering your other important bills. Just because you should have fun money doesn’t mean you should stop saving money for your important necessities and monthly bills. Financial experts say that the safest number for fun money is around 5% of your budget. Lots of things can be fun without having to be expensive! Here are some great ideas you can steal for spending your fun money.
- Hosting a Potluck Dinner with Friends
- Joining a Book or Hiking Club
- Signing up in a painting class or website design class
- Going on a spa retreat
- Attending a ball game, music festival or concert
- Surprise date night or night out with friends
- Subscribing in streaming services like Netflix or Hulu
At the end of the day, guilt-free spending is a product of living within your means. The ultimate goal of creating a fun budget is to avoid deprivation and give yourself permission to be happy. Knowing how much money you earn, spend, and can allocate for the things you want will give you more control with your current financial situation.